RSI is a period of time by comparing the average number and average closed up closed down the market to buy a few to analyze the intention of selling and strength in order to make the future market trend. 1. Formula and method RSI = [rising average ÷ (average rise + fall mean)] × 100 Specific methods: Average increase in the number of a certain period of days increases the average and the average decline is in the same period the average number of days of declines. For example, we have to calculate 九日 RSI, we must first identify the nine days before the rise in the average and the average decline, examples are as follows: Change the number of days the closing price Day 23.70 The next day 27.90 4.20 Day 26.50 1.40 Fourth day 29.60 3.10 Fifth day 31.10 1.50 Sixth day 29.40 1.70 Seventh day 25.50 3.90 Eighth day 28.90 3.40 Ninth day 20.50 8.40 Tenth day 23.20 2.80 (1-10 days and) +15.00 +15.40 ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ 15 ÷ 9 = 1.67 15.40 ÷ 9 = 1.71 The first day RSI = [1.67 ÷ (1.67 +1.71)] × 100 = 49.41 The tenth day of rising average = 4.20 +3.10 +1.50 +3.40 +2.80 / 9 = 1.67 Average decline in the tenth day +1.70 +3.90 +8.40 = 1.40 / 9 = 1.71 The tenth day RSI = [1.67 ÷ (1.67 +1.71)] × 100 = 49.41 If the eleventh day of the closing price of 25.30, the Eleventh day of the increase in the average = (1.67 × +2.10) ÷ 9 = 1.72 Eleventh day of the fall average = 1.71 × 8 ÷ 9 = 1.52 The eleventh day RSI = [1.72 ÷ (1.72 +1.52)] × 100 = 53.09 Accordingly, a few days later calculate RSI. Similarly, according to this method can calculate any number of days RSI. To a number of days with the RSI is appropriate. Originally proposed when the RSI indicator is 14 days, 14 days as a parameter value has become silent. However, in practice, analysts often feel that 14 days is too long a little, only 5 days and 9 days method. 2. Application of the principles: (1) by the formula limits, regardless of how price changes in the strength index values are between 0 and 100. (2) Strength Index is maintained above 50 indicates a strong market, whereas less than 50 expressed as a weak market. (3) the strength of many indicators fluctuated between 70 and 30. When 六日 index rose to reach 80, the stock market has been overbought and that, if passed, continue to rise, more than 90 or more, then have to seriously overbought warning area, the stock has formed a head, most likely in the short term anti- turn rotation. (4) When 六日 strength index fell to 20, said the stock market has oversold, if passed, continues to drop to 10 below, said to have been seriously oversold the stock is likely to have the opportunity to rebound. (5) for each type of stock oversold overbought values are different. (6) overbought and oversold to determine the scope also depends on two factors. The first is the characteristics of the market, ups and downs of the market is not stable for more than 70 generally provides overbought, oversold below 30. More dramatic changes in the market may provide more than 80 overbought, oversold below 20. The second is to calculate the time taken when the RSI parameters. For example, 9, RSI, can require 80 or more as overbought, below 20 is oversold. For the 24 RSI, can require 70 or more as overbought, oversold below 30. It should be noted, overbought or oversold market is not in itself a signal. Sometimes conditions change too rapidly, RSI will quickly exceed the normal range, then the RSI overbought or oversold often lost as the role of access to city warning signal. For example, early in a bull market, RSI is often 80 or more will soon enter the area, and remain in this region for a long period of time, but this does not mean that rising prices will be over. On the contrary, it is a strong performance. Not only in a bull market or bear market period, overbought market is more reliable signal. For this reason, the general should not be in the RSI enters the non-normal trading area to take action. Best price itself again when the turn signal issue transactions. This can be avoided like the above-mentioned RSI overbought zone but not immediately return to normal zone as a "trap." In many cases Gang, a good trading signals are: RSI overbought oversold zone and then through the boundaries of overbought or oversold area back to normal. However, prices here still have to get the confirmation in order to take practical action. This confirmation can be: ① the trend line break; ② moving average line break; ③ the completion of a certain price patterns. (7) strength indicators and stock price or index, often will have a first show the characteristics of future market trends, stock or index that is not up and the strength of the first indicators of rising stock price or index is not the first or the strength index decreased, the characteristic peak and trough in the stock price reaction of the most obvious. (8) when the RSI rises but stock prices fell, the decline in stock price index, or the strength of the anti-trend up, this is called "divergence." When the RSI on the 70 to 80, the price can not break the broken roof top while the RSI, which formed a "top-divergence", and when the RSI 30 to 20 under, the price break at the end while the RSI does not break at the end to form a " at the end of divergence. " This strength indicators and stock price movements, resulting in the departure from the phenomenon, usually considered the market is about to undergo major reversal signal. And overbought and oversold as divergence of the back does not constitute an actual sell signal, it just shows the market is weak. Actual investment decision should be confirmed in the price itself was made after the turn. Although in the case of market reversal does occur, this process will confirm the loss of part of the profits of investors, but it avoids the hygiene conditions in the reverse did not occur later in the case investors may make the wrong decision to sell. Comparatively speaking, this error will result in greater loss of investor, because sometimes the situation will temporarily lose momentum Zhu and then regain momentum, but when the price is not large-scale shift. 3. Evaluate (1) Relative Strength Index shows oversold and overbought market, expected prices will peak or bottom out so soft back, but only as a warning signal RSI does not necessarily mean that market potential in this direction, especially in the turbulent market when there are oversold oversold, overbought overbought as well, then be a comprehensive analysis of other indicators, can not rely solely on the RSI signal and make trading decisions. (2) departure from the trend of the signals are usually those who are after history, but also deviated from the trend occurred after the market does not reverse the phenomenon. Sometimes deviate from the first and second reverse was true, so this analysis of historical data judged to be continued in order to enhance the experience. (3) when the RSI in the leather market hovering at between 40-60, although the pressure to break through the resistance line and the line, but no actual change in price.
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1. Formula and method
RSI = [rising average ÷ (average rise + fall mean)] × 100 Specific methods: Average increase in the number of a certain period of days increases the average and the average decline is in the same period the average number of days of declines. For example, we have to calculate 九日 RSI, we must first identify the nine days before the rise in the average and the average decline, examples are as follows: Change the number of days the closing price Day 23.70 The next day 27.90 4.20 Day 26.50 1.40 Fourth day 29.60 3.10 Fifth day 31.10 1.50 Sixth day 29.40 1.70 Seventh day 25.50 3.90 Eighth day 28.90 3.40 Ninth day 20.50 8.40 Tenth day 23.20 2.80 (1-10 days and) +15.00 +15.40 ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ 15 ÷ 9 = 1.67 15.40 ÷ 9 = 1.71 The first day RSI = [1.67 ÷ (1.67 +1.71)] × 100 = 49.41 The tenth day of rising average = 4.20 +3.10 +1.50 +3.40 +2.80 / 9 = 1.67 Average decline in the tenth day +1.70 +3.90 +8.40 = 1.40 / 9 = 1.71 The tenth day RSI = [1.67 ÷ (1.67 +1.71)] × 100 = 49.41 If the eleventh day of the closing price of 25.30, the Eleventh day of the increase in the average = (1.67 × 9 +2.10) ÷ 9 = 1.72 Eleventh day of the fall average = 1.71 × 8 ÷ 9 = 1.52 The eleventh day RSI = [1.72 ÷ (1.72 +1.52)] × 100 = 53.09 Accordingly, a few days later calculate RSI. Similarly, according to this method can calculate any number of days RSI. To a number of days with the RSI is appropriate. Originally proposed when the RSI indicator is 14 days, 14 days as a parameter value has become silent. However, in practice, analysts often feel that 14 days is too long a little, only 5 days and 9 days method.
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2. Application of the principles:
(1) by the formula limits, regardless of how price changes in the strength index values are between 0 and 100. (2) Strength Index is maintained above 50 indicates a strong market, whereas less than 50 expressed as a weak market. (3) the strength of many indicators fluctuated between 70 and 30. When 六日 index rose to reach 80, the stock market has been overbought and that, if passed, continue to rise, more than 90 or more, then have to seriously overbought warning area, the stock has formed a head, most likely in the short term anti- turn rotation. (4) When 六日 strength index fell to 20, said the stock market has oversold, if passed, continues to drop to 10 below, said to have been seriously oversold the stock is likely to have the opportunity to rebound. (5) for each type of stock oversold overbought values are different. (6) overbought and oversold to determine the scope also depends on two factors. The first is the characteristics of the market, ups and downs of the market is not stable for more than 70 generally provides overbought, oversold below 30. More dramatic changes in the market may provide more than 80 overbought, oversold below 20. The second is to calculate the time taken when the RSI parameters. For example, 9, RSI, can require 80 or more as overbought, below 20 is oversold. For the 24 RSI, can require 70 or more as overbought, oversold below 30. It should be noted, overbought or oversold market is not in itself a signal. Sometimes conditions change too rapidly, RSI will quickly exceed the normal range, then the RSI overbought or oversold often lost as the role of access to city warning signal. For example, early in a bull market, RSI is often 80 or more will soon enter the area, and remain in this region for a long period of time, but this does not mean that rising prices will be over. On the contrary, it is a strong performance. Only late in a bull or bear market, overbought market is more reliable signal. For this reason, the general should not be in the RSI enters the non-normal trading area to take action. Best price itself again when the turn signal issue transactions. This can be avoided like the above-mentioned RSI overbought zone but not immediately return to normal zone as a "trap." In many cases Gang, a good trading signals are: RSI overbought oversold zone and then through the boundaries of overbought or oversold area back to normal. However, prices here still have to get the confirmation in order to take practical action. This confirmation can be: ① the trend line break; ② moving average line break; ③ the completion of a certain price patterns. (7) strength indicators and stock price or index, often will have a first show the characteristics of future market trends, stock or index that is not up and the strength of the first indicators of rising stock price or index is not the first or the strength index decreased, the characteristic peak and trough in the stock price reaction of the most obvious. (8) when the RSI rises but stock prices fell, the decline in stock price index, or the strength of the anti-trend up, this is called "divergence." When the RSI on the 70 to 80, the price can not break the broken roof top while the RSI, which formed a "top-divergence", and when the RSI 30 to 20 under, the price break at the end while the RSI does not break at the end to form a " at the end of divergence. " This strength indicators and stock price movements, resulting in the departure from the phenomenon, usually considered the market is about to undergo major reversal signal. And overbought and oversold as divergence of the back does not constitute an actual sell signal, it just shows the market is weak. Actual investment decision should be confirmed in the price itself was made after the turn. Although in the case of market reversal does occur, this process will confirm the loss of part of the profits of investors, but it avoids the hygiene conditions in the reverse did not occur later in the case investors may make the wrong decision to sell. Comparatively speaking, this error will result in greater loss of investor, because sometimes the situation will temporarily lose momentum Zhu and then regain momentum, but when the price is not large-scale shift.
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3. Evaluate
(1) Relative Strength Index shows oversold and overbought market, expected prices will peak or bottom out so soft back, but only as a warning signal RSI does not necessarily mean that market potential in this direction, especially in the turbulent market when there are oversold oversold, overbought overbought as well, then be a comprehensive analysis of other indicators, can not rely solely on the RSI signal and make trading decisions. (2) departure from the trend of the signals are usually those who are after history, but also deviated from the trend occurred after the market does not reverse the phenomenon. Sometimes deviate from the first and second reverse was true, so this analysis of historical data judged to be continued in order to enhance the experience. (3) when the RSI in the leather market hovering at between 40-60, although the pressure to break through the resistance line and the line, but no actual change in price.
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4. Applications
1. Short-term RSI (usually white) values below 20, from the bottom up cross-term RSI (usually yellow) value for the buy signal. 2. White short-term RSI value above 80, down from the cross on yellow long-term sell signal when the RSI value. 3. Down by the short-term RSI value above 50, representing share price has weakened. 4. Short-term RSI values above 50 from the bottom up, on behalf of share price has firmed. 5. When the RSI is above 80 into the overbought zone, subject to the formation of short-term price correction. 6. When the RSI is below 20 into the oversold zone, the formation of short-term rebound in stock prices at any time. 7. Bobby shares a high wave, while the RSI a wave of low-Bobby. The formation of departure from the top, and the prices could reverse decline. RSI to determine the bottom of the graph with less obvious. 8. The two successive low RSI A, B with a straight line (see Figure), when the RSI down below this line, the sell signal. 9. The RSI of two consecutive peaks C, D with a straight line (see above), when the RSI break this line up for the buy signal. 10. In order to confirm the RSI are overbought or oversold zone 50 in line is crossed. Should make use of long-term RSI, in order to reduce the incidence of wire fraud. White short-term RSI as shown in Figure 50 in the world beneath, but the RSI is not yellow under long-term wear, indicating the rising trend has not changed, the short-term RSI under 50 to wear a "cheat line", the stock rose later confirmed that Zhu Bo point. 11. In stock consolidation period should abandon the use of the RSI indicator, turn indicators observed in the ADX DMI is already out of the quagmire. 12. Change in the strength of a strong market, if the VR and ROC indicators show that stock price is strong, then abandon the use of the RSI indicator.